Currency is the money people use to make trade easier. We all know that there is not a currency for Earth; each country has its own currency except Europe. In the United States, we use U.S. dollars to buy goods and services. When we Americans work at a job, we are paid in dollars. Most of the time, when you are in a different country, you cannot buy goods and services with currency from your own country. So what do you do? You trade it in, or exchange it! With each exchange; however, the bank charges a fee. A business that exchanges a lot of money will pay many fees.

For international trade to be successful, countries must agree on a system of how much one currency trades for another. The exchange rate is based off the laws of supply and demand – the more people (traders of currency) are willing to pay for a dollar, the more valuable it becomes.

There are many foreign exchange markets where money from around the world is traded many times a day – how well or how poorly a currency is trading in these markets determines the exchange rate. The exchange rate between currencies fluctuates (changes) over the day.

Example: If 1 US Dollar = .69 Euros, how much would a 3 dollar ice cream cost in Euros?

1 dollar = 0.69 Euros

3 dollars X

1X = 3 x 0.69 Euros

X = 2.06 Euros

You and your family are on a trip to Africa. You are leaving the USA with $100. As you travel through Africa, you will have to exchange your money each time you travel to a new country. Make sure you do your math well; you don’t want to lose money!

ONE: You have just traveled 22 hours on an airplane and you have arrived in Cape Town, South Africa. If the exchange rate is 1 US dollar = 10.50 South African rands, then how much money do you have in rands?

You and your family check into the hotel when you realize you left your toothbrush at home. So you head out to the store to buy a new one. You buy a toothbrush that costs 21 rands. How much money do you have left (in rands)?

TWO: You family had a good time in Cape Town, but now you have traveled several hours on a bus to get to Nairobi, Kenya. Now that you have traveled to a new country, you need to exchange your money so you can purchase items. If 1 South African Rand = 8 Kenyan Shillings, how many Shillings do you have?

You have toured the city of Nairobi for days and now you have stopped at a souvenir shop. You want to buy a souvenir t-shirt. It costs 960 Kenyan Shillings. How much money do you have left in Shillings?

THREE: Now you and your family have traveled to Egypt to see the ancient pyramids at Giza, Egypt. If 1 Kenyan Shilling = 0.10 Egyptian Pounds, how much money do you have in Egyptian Pounds?

You simply can’t leave without touring the pyramids. Tickets are 280 Egyptian Pounds. How much money do you left in Egyptian Pounds?

HOME AGAIN: What an amazing trip! But, sadly, it is time to go home. When you return to Hartsfield-Jackson Airport in Atlanta you want to exchange your remaining money back to dollars! If 1 US dollar = 5.50 Egyptian Pounds, how much money do you have in Dollars?

How much money, in US dollars, did you spend in Africa?

$100 - ______= $

Explain what difficulties you would faced and how much more challenging this trip would have been without an internationally agreed upon system for exchanging money.

______